Insiders still own 53% of Om Infra Limited (NSE:OMINFRAL) despite recent sales

Key Insights

• Insiders appear to have a vested interest in Om Infra's growth, as seen by their sizeable ownership
• The top 9 shareholders own 50% of the company
• Insiders have been selling lately

To get a sense of who is truly in control of Om Infra Limited (NSE:OMINFRAL), it is important to understand the ownership structure of the business. With 53% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Insiders are at the top of the company's shareholdings despite selling some shares recently. As a result, they were also the biggest winners as market cap hit ₹20b last week.

In the chart below, we zoom in on the different ownership groups of Om Infra.

Check out our latest analysis for Om Infra

What Does The Institutional Ownership Tell Us About Om Infra?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Om Infra. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Om Infra's earnings history below. Of course, the future is what really matters.

Om Infra is not owned by hedge funds. T C Kothari And Sons Family Trust is currently the largest shareholder, with 12% of shares outstanding. For context, the second largest shareholder holds about 8.6% of the shares outstanding, followed by an ownership of 7.4% by the third-largest shareholder. Sunil Kothari, who is the third-largest shareholder, also happens to hold the title of Vice Chairman. In addition, we found that Vikas Kothari, the CEO has 1.9% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Om Infra

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own the majority of Om Infra Limited. This means they can collectively make decisions for the company. That means they own ₹11b worth of shares in the ₹20b company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Om Infra. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 16%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Om Infra you should be aware of, and 1 of them makes us a bit uncomfortable.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.